Stocks keep booming. More than any other reason, the big bull market is being organically driven by profits.

Businesses are making good money. And that’s the strong currency behind their rising valuation.

I know that experts always talk about various political or economic factors, like the China trade, or what the Fed’s going to do, peace in the Middle East, or why might New York City elect a communist mayor.

I’m not saying these things don’t matter. And in most cases, President Trump is carving out success after success. So it’s a good backdrop for stocks.

Fundamentally, the stock is only worth what someone will pay for it, and the overall market, with millions of investors using their wisdom and information, want to know if a company has a good future.

So let me repeat my age-old mantra: Profits are the mother’s milk of stocks.

By the way, the outlook for profits, according to FactSet, is pretty spiffy.

Future earnings for 2025, nearly $300 per share, that’s a 14 percent increase for the year. And a multiple of 22.8 times earnings.

The 10-year Treasury, which is a reasonable discount rate to capitalize corporate profits into their future value, well that’s been steady at around 4 percent. Relatively low.

Again, though, I want to emphasize the very basic idea that successful companies have to make money.

And if they do, then investors will buy their shares.

And in the aggregate, that determines the value of indexes like the Dow Jones, or the S&P 500, or the tech-heavy Nasdaq.

Here’s another point: Profits are also the lifeblood of the economy.

You’re not gonna have a strong economy if the majority of businesses are losing money, which would then force them to lay off workers, which then depresses income and consumer spending.

Yet supply-siders know you need to begin the forecasts by looking at the health of the business.

Right now the booming stock market, which is giving a tremendous boost to confidence in our nation’s profitable businesses, well, that booming market is predicting a strong economy next year and beyond.

In fact already this year, the second and third quarters may be rising at close to 4 percent, that according to the Atlanta Fed’s GDPNow.

So, roaring stocks suggest that this can continue.

And you know what else? Mr. Trump’s big, beautiful bill cuts taxes for businesses across the board.

And that’s going to improve profits. And that’s good for stocks and the economy.

Think of it.

From Mr. Kudlow’s broadcast on Fox Business Network.